According to the IG Memorandum which accompanied the Report, its overall goal is to "focus attention on significant issues with the objective of working with Agency managers to enhance the effectiveness of SBA's programs and operations.

The following is a Table from the IG's Report. Each management challenge contains a series of recommended actions, and each action is assigned a color score to indicate its status/progress. The colors are as follows: green for "implemented," yellow for "substantial progress," orange for "limited progress," and red for "no progress."

While we believe each of the challenges identified in the Report are significant, for purposes of this blog post, we will be discussing Challenges 1, 3 and 5, as they are most relevant to our clients and our practice. However, our discussion will primarily provide a summary of the Report's main points as opposed to our opinions on the Report (I think we'll save that for another blog post).

Challenge 1: Weaknesses in Small Business Contracting Programs and Inaccurate Procurement Data Undermine the Reliability of Contracting Goals and Achievements

As many of our readers know, the Small Business Act established a government wide goal that 23% of all prime contracts be awarded to small businesses each year; further, it has been highly publicized that for the past 2 fiscal years, the Small Business Goaling Report found the goal to have been met by the Federal government. However, Congress and others have expressed concern over the accuracy of the Small Business Goaling Report - specifically, the concern is that many contract awards were actually performed by other than small businesses. The Report notes that while the SBA has begun to correct weaknesses within its information systems that would impact the accuracy of the goaling data, more progress is necessary in this regard.

However, and more significantly, the IG also notes that the SBA, in engaging in the rulemaking process for WOSB to receive sole-source contracts without also putting in place a formal certification process, has created a situation where the government will be "more likely to award WOSB contracts to ineligible firms."

The IG's recommended actions as to this challenge are:

Revise the surveillance review process to ensure that reviews are conducted in a thorough and consistent manner;

Strengthen controls to ensure the accuracy of the Federal Government's annual small business procurement goals achievements reported in the Small Business Goaling Report;

Implement a certification for WOSBP;

Revise SBA's Program Fraud Civil Remedies Act regulations so that SBA can pursue violations of its Federal contracting programs and demonstrate a capacity for taking enforcement actions under the statute.

Challenge 3: SBA Needs Effective Human Capital Strategies to Carry Out its Mission Successfully and Become a High-Performing Organization

This next challenge is something that we at Holomua Consulting Group have commented on in our formal comments to SBA regulations each and every time we submit comments. As many of our readers know, SBA is woefully understaffed and with respect to the 8(a) BD program, much of their efforts are focused on compliance rather than the business development aspect(s) of the program, which is ultimately to the detriment of the 8(a) companies. Adding to the district office workloads by creating new programs (i.e., the new mentor-protege program for all small businesses and the certification program for WOSB which is imminent) without a corresponding increase in SBA human capital resources does not make sense. Thus, we are supportive of SBA's efforts to make addressing this challenge a priority.

The IG's recommended actions as to this challenge are:

Ensure the Agency has an effective, comprehensive workforce and succession plan that aligns talent needs and capabilities with SBA's FY 2011-2016 strategic plan. SBA's workforce and succession planning goals should reflect the the need to recruit and retain the appropriate talent, and should establish appropriate metrics to gauge SBA's success at having the right people, in the right jobs, at the right time.

Ensure that human capital management SOPs are updated and appropriately structured to support the Agency's long-term goals and objectives and Government-wide human capital initiatives.

Demonstrate sustained progress toward a high-performing, employee-driven culture through activity and effort as prioritized by SBA's employee engagement initiative for two consecutive years.

Challenge 5: SBA Needs to Modify the Section 8(a) BD Program So More Firms Receive Business Development Assistance, Standards for Determining Economic Disadvantage Are Justifiable, and Firms Follow 8(a) Regulations When Completing Contracts

The area that is most relevant to our current practice is challenge 5, regarding the 8(a) Business Development program. The IG notes that as it relates to the 8(a) BD Program, the SBA's primary challenges have been: (1) in ensuring that the program truly prepares participants for a competitive market (noting that in the past, SBA has not placed adequate emphasis on business development); and (2) in ensuring that only 8(a) firms that have economically disadvantaged owners in need of business development remain in the program.

The IG notes that the SBA has made its assistance more readily available through resource partners; that SBA has taken steps to ensure opportunity specialists assess participants' business development needs during site visits; and that they have revised their regulations to ensure that companies deemed "business successes" graduate from the program rather than allowing them to remain in the program and receive 8(a) contracts.

The IG's recommended actions as to this challenge are:

Develop and implement a plan, including SOP provisions, which ensures that the 8(a) Business Development Program identifies and addresses program participants' business development needs on an individualized basis.

Update and issue the 8(a) Business Development SOP to reflect the March 2011 regulatory changes.

Establish objective and reasonable criteria that effectively measure "economic disadvantage," and implement the new criteria.

When Holomua Consulting Group was in Washington D.C. in May of this year, we observed the SBA team at Headquarters working diligently on the SOPs noted in the recommendations (and the Report noted that as of October 2015, the SBA had submitted the SOP through its internal clearance process), so we are hopeful that the revised SOP will be forthcoming so that many of the gray areas and issues that we as consultants deal with will be clarified. In addition, we attended a roundtable with SBA Administrator Maria Contreras-Sweet during her recent visit to Hawaii and we are hopeful that under her leadership, the SBA will continue to make progress on the issues and challenges identified in this Report.